What is a Solar Inverter? Types, Pros, and Cons. 

by Tyler Deken November 8th, 2022

Key Points

  • Hybrid inverters are the best choice for anyone looking for a comprehensive solar solution with the ability to send power to the grid and a home battery system. 
  • String inverters are a great fit for a standard, cost-effective inverter system. They work best on unshaded, uniform houses
  • Power optimizers are a complicated middle ground between string inverters and micro-inverters, but can provide amazing returns.  

  • Micro-inverters are one of the most expensive solutions on the market, and are great if you value individual panel monitoring.  

What is a Solar Inverter? 

Fun fact: solar energy won’t naturally provide electricity in a format that can power the lights in your home. 

That is where a solar inverter comes in. 

Inverters convert the power produced by your solar panels into something that you can actually use. 

Your home is wired to use alternating current (AC) power, but solar panels will produce direct current (DC) power.

An inverter will convert your panel’s DC power production and convert it into usable AC power. 

The best way to think about this is converting the money in your bank account into cash, but for your solar power. 

Even if you have a million-dollar balance, you may need to have access to cash periodically, and you’ll need a bank to make that happen. 

What are the different types of solar inverters?

Numbers assume a 1500 square-foot house in California with 15 to 18 panels, no labor, permits or additional costs included. Inverters typically cost around 6% to 10% of the total solar installation cost. Assuming installation price of 15,000, with 11,280 kWh in yearly usage. 

  • A hybrid inverter may be right if: You want the best solution on the market right now with the ability to send power in multiple directions 
  • A string inverter may be right if: You want a simple, cost-effective setup, and you have a home with a uniform roof and very little shade 
  • A micro-inverter may be right if:You want the ability to closely monitor individual panels and don’t mind the high initial cost 
  • A power optimizer may be right if:You want the ability to monitor individual panels and you have a non-standard or semi-shaded roof 

Right now, there are four types of solar inverters available to homeowners. Hybrid inverters, string or central inverters, power optimizers, and micro-inverters. 

Each type of solar inverter has its advantages and disadvantages. 

When you are looking at a solar panel system for your home, it is critical to understand these differences, as well as the pros and cons of each type of system. 

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Solar Inverters: Types, Pros and Cons

Hybrid Inverters 

As solar energy becomes more productive over time, homeowners are faced with a daunting task: what do you do with any excess energy that you produce? 

Solar inverters are designed to send power in one direction, from solar panels to the building, while sending any excess electricity to the grid. 

But what happens when you want to add a battery to your solar system? 

You may need a hybrid inverter. Hybrid inverters allow you to manage multi-directional power flows with a built-in monitoring system, meaning that you can easily see what is being used, stored, and sold back to the grid. 

Most hybrid inverters have one central inverter, or one large central banking plaza, that can handle a variety of movements. 

Hybrid inverters offer the highest level of flexibility, allowing you to create a home solar system that does exactly what you want it to. 

String Inverters 

Also known as central inverters, string inverters are the oldest and most commonly used type of solar inverter. 

They have one central inverter, or one bank in the neighbourhood to complete this conversion. 

They work by connecting all of your panels to one central inverter. Simple, right? String inverters are a cost effective way to convert your DC power into that crucial AC power that you need for your home. 

Now, that being said, they will work amazingly if you don’t have a lot of shade on your property from any nearby trees or fixtures like a chimney on your home. 

To maximize a string inverter’s potential power output, it is also great to have all of your panels pointing in the same direction. 

One final thing that needs to be mentioned: string inverters only allow system-wide monitoring, meaning that you can’t see the performance of any individual panel. 

This means that problems with power output may be difficult to identify, making maintenance difficult. 


One of the newest additions to the solar scene are micro-inverters. These are small units installed in each solar panel that convert power right then and there, instead of being routed to a central unit. 

Keeping with our analogy, this is akin to having a small bank or ATM on every street corner. 

Despite their high cost, they have been rapidly gaining popularity, especially in the residential solar panel market. 

Why? They enable you to monitor the performance of each individual panel, allowing you to rapidly diagnose any output issues and flag them for correction. 

Another huge benefit is their ability to scale with you as your power needs grow. Let’s say you purchase a Tesla, or PHEV, and need more power to charge it at night. 

Adding additional panels with micro-inverters is far simpler compared to the costly expansion warranted when you need an extra string inverter system. 

Power Optimizers 

Now, for the middle ground. Power optimizers are somewhere in between string inverters and micro-inverters with respect to their cost and function. 

Much like micro-inverters, power optimizers consist of a unit on the back of each solar panel, but this time, they also work in conjunction with a centralized converter.

But there is a caveat here. Instead of converting DC to AC at the panel, they send what is called a “conditioned charge” to the central inverter, which completes the conversion to AC power. 

What does this mean? Well, it’s more efficient than a string inverter, as one dimmed panel won’t affect the entire production output, but it is also more cost-effective than a microinverter. 

Sticking with our analogy, this is akin to being able to cut in front of the line anytime you walk into your neighbourhood bank. Yes, it's not as good as having a stop on every corner, but you’ll never have to wait in line again when you show up. 

Which type of inverter is right for you? 

When you make an investment in solar technology for you and your family, it is important to pick an inverter that works best for your specific situation. 

A hybrid inverter may be right if…

  • You have a home battery system 
  • You want to be able to send power to multiple locations 
  • You want the ability to closely monitor your solar system 
  • You want the best solution on the market right now

A string inverter may be right if…

  • You are looking for a cost-effective system 
  • You have a gable or hip roof 
  • You don’t have a lot of shade on your property 

A micro-inverter may be right if…

  • You want the ability to monitor individual panels 
  • You want the ability to expand your power output in the future 
  • You want a system that is easy to maintain 

A power optimizer may be right if…

  • You want something in the middle 
  • You want the ability to monitor individual panels 
  • You have a semi-shaded property or non-standard roof

If you have any questions, connect with our team. Our experts at Spark Change would be happy to speak with you to explain the pros and cons of each type of inverter and find a solution that is right for you and your family. 

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